RBI decreases dollar limit for students going abroad

With rupee's rapid depreciation, coupled with RBI bringing down the amount of dollars one can take out of the country, students may have to trim expenses and redraw their strategy. ET offers quick solutions to tide over the crisis.

Students aiming for higher education in foreign universities are a bit nervous about their future.

A rapidly depreciating rupee was the first blow. The second one was from the Reserve Bank of India (RBI) a few days ago. In its bid to arrest the free-falling rupee, the banking regulator has brought down the amount of dollar one can take out of the country from $2,00,000 to $75,000 in a financial year. "Education loans and remittances related to overseas studies are a part of the $75,000 limit, but if someone wants to remit a higher amount, they can do so with prior permission of the central bank," says the RBI spokesperson.

That statement sure offers a ray of hope for those who have the wherewithal, but for others the only way out is to prune expenses and redraw the strategy to fund education.

"Almost 60-70% of students who go abroad will not find it difficult to adhere to this limit. However, in case of several programmes, particularly the MBA courses, the course fee itself will exceed the $75,000 limit," says Naveen Chopra, founder and chairman of the Delhi-based overseas education consultancy firm The Chopras. That means the RBI move could have an impact on some management programmes immediately.

"The comfort level has already shrunk. Students who have enrolled in high-end universities or have taken up courses with huge course fee, will have a tough time," adds Chopra.

Cutting corners

Most Indian students are known to lead an almost nerdy life in foreign universities. This habit, if inculcated, will sure help the future candidates. "Indian students are usually quite thrifty while studying abroad. In the US, for a post-graduation course, the annual fee is typically in the range of $25,000-40,000, on an average. Living expenses could be around $15,000 a year, depending on the lifestyle," says Swati Salunkhe, managing director with career counselling firm The Growth Centre.

If your total expenses — including course fee and living expenses — in a financial year exceed $75,000, you will have to make some adjustments to your plan. That includes compromising on the university or institution you have always aspired for. "You can look for cheaper educational destinations. For instance, Australia, Germany, Singapore, and Canada are some of the countries that one can consider to pursue studies. The reasons are varied like low tuition fees or low living expenses and even work permits, which make these countries appealing," says Salunkhe.

You should also look for options to secure scholarships and tuition waivers. Similarly, you can also try to get subject credits by shortening the duration of the course. "Students studying abroad can get the benefit of completing the course in lesser duration by taking up the subject credits during the vacation period given by the university. Most international students do not take break during the course of study and complete the required credits faster as it helps them reduce the course duration and also save on the travel costs. This is possible as the universities abroad provide flexibility for students," adds Salunkhe.

Funding options

Obviously, obtaining a scholarship is the best way to fund your studies and overcoming the problems of restrictions on taking dollars out of the country. Another option is to take up part-time jobs. "They do, and need to, look for these jobs, irrespective of any constraint of bringing in dollars from India. Such income will help them fund their regular, day-to-day expenses," says Chopra. Therefore, identifying the right assignment should be your first priority as soon as you are reasonably settled. "International students who are studying full-time courses in universities abroad are allowed to work part-time, generally 20 hours in a week, in most of the countries. These part-time jobs are generally on-campus and off-campus.

Students have to complete the required formalities to work offcampus," says Salunkhe. Off-campus jobs could include odd jobs in malls,

restaurants, gas stations and shops. "US universities have more options of teaching assistantship. This is provided to students pursuing their master's courses. They get a stipend amount for the same. Students who are pursuing researchbased courses have the option of getting research assistantships. Working in libraries, university stores, canteens are considered as on-campus part-time opportunities for students," she adds.

You can also explore the option of borrowing from the banks in your destination country. "It will help partly finance any shortfall in funds. Large banks like the Bank of America do extend cheaper loans at an interest rate of around 7-8% to international students on the condition that a US citizen or a Green Card holder is a co-signor (guarantor). As long as you have a co-signor, obtaining a loan will not be a difficult task," says Chopra. Ascertain whether your university has a tie-up with the banks, as several banks extend loans only to the institutions on their list. Applications can be sent through the banks' websites, too. Even before you leave the country, find out if your relatives, if any, are willing to stand guarantee to the loan. However, do ensure that you closely study the visa rules as well as regulations of the university before enlisting the help of such family sponsors.

Finally, if everything else fails, you can turn to your extended family for financial help. "It is quite common to see Indian students seeking support from their relatives. They can come to your aid to cushion the impact of shortfall in funds on account of foreign exchange restrictions," says Chopra.